Celsius Network, a prominent cryptocurrency lending platform, has officially closed its bankruptcy proceedings, marking a significant milestone. In a statement released on Wednesday, the company announced that it will disburse more than $3 billion to its creditors. Additionally, creditors will receive a stake in the newly established Ionic Digital Inc. mining operation, which is expected to go public once it receives the necessary approvals.
Overcoming challenges and securing currencies
The road to recovery for Celsius Network has been challenging, but the successful outcome relief many stakeholders. David Barse and Alan Carr, members of the special board committee overseeing the bankruptcy, expressed their satisfaction with the result.
They noted that when they were appointed in June 2022, there were doubts about whether Celsius could survive the ordeal. However, they managed to safeguard the platform’s cryptocurrency holdings, negotiate agreements with creditors, and restructure the company’s parts that could continue operating.
Another crucial aspect of Celsius Network’s journey through bankruptcy was resolving legal issues. The company settled cases with several U.S. regulatory authorities, including the Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. These settlements were essential in clearing the path for the company’s reemergence from bankruptcy.
Celsius new leadership and distribution plans
With the bankruptcy process behind them, Celsius Network is now looking towards the future. Matt Prusak, the Chief Commercial Officer of Hut 8, the company responsible for managing Ionic’s mining operations, has been appointed Ionic’s CEO. This appointment marks a significant step in the company’s transition towards its new phase.
In a separate filing, Celsius Network revealed its distribution plans for cryptocurrencies. PayPal and Coinbase have been chosen as the platforms to distribute these digital assets to creditors. It is important to note that Celsius will not distribute these assets through its mobile or web applications, which will be shut down around February 28.
Celsius Network made headlines during its bankruptcy due to a $4.7 billion settlement with U.S. authorities over fraud allegations. The allegations revolved around former CEO Alex Mashinsky, who resigned in September 2022.
He was arrested on fraud charges related to manipulating the price of the lender’s CEL token. Mashinsky, however, has vehemently denied these allegations and was released on a $40 million bond. His banking and real estate assets have been frozen, and his trial is scheduled for September 2024.